Walmart is buying India’s Flipkart. Walmart continues taking over on technology to control the e-commerce market and compete against Amazon. The company finally make it official. Because the giant corporation is acquiring Flipkart.
The world’s largest retailer will take control soon. Of the Bengaluru-based e-commerce company for its biggest acquisition ever, Softbank chief executive officer Masayoshi Son said in an earnings webcast today, as per Bloomberg.
Softbank’s 20% stake in Flipkart valued at about $4 billion. (Rs27,000 crore). Son said, adding that he had invested $2.5 billion in the company. Son did not share any further details of the transaction.
“Walmart is purchasing Flipkart. Last night there was the official announcement. I believe the deal was reached and the money about 2.5 billion that we have invested has turned out to be 4 billion.” Son said.
Amazon was also reportedly in the fray to acquire Flipkart and went far enough to offer a “breakup fee” of up to $2 billion to prove its seriousness. A breakup fee penalty has set during the takeover process. This agreement will pay if the target backs out of the deal.
A giant leap
The deal marks a significant milestone for Flipkart.
What started in 2007 as an online bookstore operating out of the Bansal duo’s two-bedroom apartment in Bengaluru. Flipkart is now the most-valued new-age internet company in the country. With around 30,000 employees. It is also one of the highest-funded private companies in the world. Which has given a giant like Amazon a tough time in India during the last five years?
An internet business worth billions and backed by marquee investors like Softbank, Tiger Global, DST Global, and Accel Partners, among many others, Flipkart helped break India’s image as just the world’s back office.
“In the US, Walmart is the only formidable competitor left for Amazon. Walmart has been growing its e-commerce operations a lot and Amazon has increased its footprint with physical stores,” Kartik Hosanagar, a professor of technology and digital business at the University of Pennsylvania’s Wharton School, told Quartz last week.
“Walmart’s looming investment in Flipkart reflects that. Walmart is fighting Amazon and Alibaba in China through its partnership with JD. I suspect something similar will happen in India through a partnership with Flipkart,” he added.